From June 25 to June 29, 2018

BOUNDED RATIONALITY
&
BEHAVIORAL ECONOMICS
A review of recent approaches

PSE SUMMER SCHOOL

www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018 BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS

BOUNDED RATIONALITY
& BEHAVIORAL ECONOMICS
A review of recent approaches
From June 25 to June 29, 2018

OVERVIEW
Standard economics has been the subject of many critiques. Mainstream economic models and analysis rely on a level of
sophistication that is hard to justify from an introspective viewpoint but also considering the large body of experimental
evidence. Recent years have witnessed a flurry of alternative approaches. The programme proposes reviewing a large
body of these approaches, with the goal of stimulating new research both theoretical and applied.

WORKSHOP
Participants will have an opportunity to submit work to be presented and discussed by fellow participants and faculty in
daily workshops.

PREREQUISITES
Graduate in economics with solid background in economic theory, decision theory and game theory.

PROFESSORS
Olivier Compte is professor of economics at the Paris School of Economics. He is also Ingénieur des Ponts et Chaussées.
He graduated from Ecole Polytechnique and Ecole des Ponts et Chaussées, and received his PhD in economics from
Stanford University. His fields of interest are repeated games, bargaining, auction theory, mechanism design, bounded
rationality and Economics and psychology. He is a fellow of the Econometric Society, and council member of the Game
Theory Society. http://www.parisschoolofeconomics.eu/en/compte-olivier/

Philippe Jehiel is professor of economics at the Paris School of Economics and at University College London. He is also
Ingénieur des Ponts et Chaussées. He graduated from Ecole Polytechnique and Ecole des Ponts et Chaussées, and
received his PhD in economics from EHESS and the European Doctoral Programme. His fields of interest are bargaining,
auction theory, mechanism design, and bounded rationality. He is a fellow of the Econometric Society, of the European
Economic Association and of the Society for the Advancement of Economic Theory. He is a former co-editor of
Econometrica and council member of the Econometric Society and of the Game Theory Society.
http://www.parisschoolofeconomics.eu/en/jehiel-philippe/

Jean-Marc Tallon is professor at the Paris School of Economics and a senior fellow of CNRS. He holds a Ph.D. from the
University of Pennsylvania. He is Director of Research of the Paris School of Economics. His research interests are in
decision theory under uncertainty, risk sharing and financial economics and more generally in the questions of the
foundations and consequences of alternative representations of uncertainty and beliefs.
http://www.parisschoolofeconomics.eu/en/tallon-jean-marc/

Programme Supervisor: Philippe Jehiel

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

PSE SUMMER SCHOOL 2018 BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS

SCHEDULE
Monday June, 25th
8.30 am – 9 am Welcome coffee
9 am - 10.30 am Philippe Jehiel, Bounded Rationality in Games
10.30 am - 11 am Break
11 am - 1 pm Jean-Marc Tallon, Individual Decision Making
1 pm - 2 pm Lunch
2 pm - 4 pm Olivier Compte, Ignorance, Information and Sophistication
5.30 pm – 6.30 pm Thomas Piketty, Plenary Lecture
From 6.30 pm Welcome cocktail

Tuesday June, 26th

9 am - 10.30 am Olivier Compte, Ignorance, Information and Sophistication
10.30 am - 11 am Break
11 am - 1 pm Philippe Jehiel, Bounded Rationality in Games
1 pm - 2 pm Lunch
2 pm - 4 pm Jean-Marc Tallon, Individual Decision Making
From 6 pm Social Event

Wednesday June, 27th

9 am - 10.30 am Jean-Marc Tallon, Individual Decision Making
10.30 am - 11 am Break
11 am - 1 pm Olivier Compte, Ignorance, Information and Sophistication
1 pm - 3 pm Lunch - Workshop presentations
3 pm - 5 pm Philippe Jehiel, Bounded Rationality in Games

Thursday June, 28th

9 am - 10.30 am Philippe Jehiel, Bounded Rationality in Games
10.30 am - 11 am Break
11 am - 1 pm Jean-Marc Tallon, Individual Decision Making
1 pm - 3 pm Lunch - Workshop presentations
3 pm - 5 pm Olivier Compte, Ignorance, Information and Sophistication
From 6 pm Social Event

Friday June, 29th

9 am - 10.30 am Olivier Compte, Ignorance, Information and Sophistication
10.30 am - 11 am Break
11 am - 1 pm Philippe Jehiel, Bounded Rationality in Games
1 pm - 3 pm Lunch - Workshop presentations
3 pm - 5 pm Jean-Marc Tallon, Individual Decision Making
From 6.15 pm Social Farewell cocktail/certificates

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

PSE SUMMER RATIONALITY
BOUNDED SCHOOL 2018 & BEHAVIORAL ECONOMICS
BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS

Bounded rationality in Games

Philippe Jehiel

This course takes place every day

OBJECTIVES
The modern approach to solution concepts in games is by a learning story. Players may have wrong expectations
(either about the opponent’s play or about the assessment of their own strategy) to start with, but as experience
accumulates expectations should get closer to the truth: if behaviors stabilize they should correspond to an equilibrium
play. However, this view (at least applied in a strict sense) seems less plausible in complex games. Think of chess.
Predicting what the opponent will do in more than a few steps ahead is impractical. Knowing or learning the value of a
board position is impossible (for most positions), even for the best chess players. Such simple considerations suggest
the need to develop models of bounded rationality, which may next be used to approach a number of economic
interactions in a new way.
The objective of the course is to stimulate new research in game theory and applications that maintains the game
theoretic tradition of high logical standards while incorporating elements of bounded rationality/behavioral economics
in the analysis. Various approaches to behavioral economics and bounded rationality are discussed in the course.

COURSE STRUCTURE and REQUIRED READINGS

1. General overview of standard approach and its introspective vs learning justification
- Huck Jehiel and Rutter (2011): “Learning spillover and analogy-based expectations: A multi-game
experiment”, Games and Economic Behavior
2. Analogy-based expectation equilibrium
- Jehiel, P. (2005): “Analogy-based Expectation Equilibrium”, Journal of Economic Theory
- Jehiel, P. and F. Koessler (2008): “Revisiting Games of Incomplete Information with Analogy-based
Expectations”, Games and Economic Behavior
3. Equilibrium with subjective prior and self-confirming equilibrium
- Dekel E., D. Fudenberg and D.K. Levine (2004): “Learning to Play Bayesian Games”, Games and Economic
Behavior
- Eyster E. and M. Rabin (2005): “Cursed Equilibrium”, Econometrica
4. Valuation equilibrium and equilibrium with imperfect recall
- Jehiel, P. and Samet, D. (2007): “Valuation Equilibrium”, Theoretical Economics
- Piccione, M. and A. Rubinstein (1997): “On the Interpretation of Decision Problems with Imperfect Recall”,
Games and Economic Behavior
5. Level k and quantal response equilibrium
- Nagel, R.M. (1995): “Unraveling in guessing games”, American Economic Review
- McKelvey, D. and T. Palfrey (1995): “Quantal Response Equilibrium”, Games and Economic Behavior
- Osborne M.J. and A. Rubinstein (1998): “Games with procedurally rational players”, American Economic
Review

OTHER REFERENCES
General References
- Fudenberg, D. and Levine, D. (1998): “The Theory of Learning in Games”, MIT Press.
- Kreps, D. (1990): “Game Theory and Economic Modelling” (Clarendon Lectures in Economics)

Analogy-based expectation equilibrium

- Ettinger, D. and Jehiel, P. (2010): “A Theory of Deception”, AEJ: micro
- Jehiel, P. (2011): « Manipulative auction design », Theoretical Economics

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

PSE SUMMER SCHOOL 2018 BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS

Valuation equilibrium
- Jehiel, P. and Samet, D. (2005): “Learning to Play Games in Extensive Form by Valuation”, Journal of Economic
Theory

Self-confirming equilibrium
- Battigalli P., M. Gilli and M.C. Molinari (1992): “Learning and Convergence to Equilibrium in Repeated
Strategic Interactions: An Introductory Survey”, Ricerche Economiche.

Nash equilibrium with Subjective Prior

- Harsanyi, J.C.(1967), “Games with incomplete information played by Bayesian players”, Management Science

Level k approach
- Stahl, D.O. (1993): “Evolution of smart n players”, Games and Economic Behavior
- Camerer, C.F., T. Ho and J.K. Chong (2004): “A Cognitive Hierarchy Model of Games”, Quarterly Journal of
Economics

Other approaches
- Esponda, I. (2008): “Behavioral Equilibrium in Economies with Adverse Selection”, American Economic Review
- Spiegler R. (2016): “Bayesian networks and boundedly rational expectations”, Quarterly Journal of Economics
- Esponda, I. and D. Pouzo (2016): “Berk-Nash Equilibrium: A Framework for Modeling Agents with Misspecified
Models”, Econometrica

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

PSE SUMMER RATIONALITY
BOUNDED SCHOOL 2018 & BEHAVIORAL ECONOMICS
BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS

Individual decision making

Jean-Marc Tallon

This course takes place every day

OBJECTIVES
This course will cover some major approaches to the study of individual behavior and decision making. It will explore a
selection of the most important ideas in behavioral economics, restricting ourselves to models of individual decision
making. We will cover four domains: choice behavior, representation of and behavior under uncertainty, time
preferences, and other-regarding preferences. The goal is to introduce models of behavior alternative to the standard
homo oeconomicus approach, building on some insights from experimental economics and psychology.

COURSE STRUCTURE and REQUIRED READINGS

1. Introduction
- Camerer, C. (2006), “Behavioral Economics”, in Advances in Economics and Econometrics: Theory and
Applications, Ninth World Congress, volume II, Cambridge U. Press; comments b A. Rubinstein.
- Thaler, T. (2016), “Behavioral Economics: past, present and future”, American Economic Review, 106,
1577-1600.
2. Making choices
a. Values, preferences and choices
b. Mental accounting
c. Endowment effect, status quo bias and default options
- Akerlof, G. and R. Kranton (2010), “Identitiy economics”, Princeton U. Press
- Bénabou, R. and J. Tirole (2006), “Incentives and pro-social behaviour”, Amercian Economic Review, 96,
1652-1678.
- Gilboa, I. and D. Schmeidler (2001), “Case based decision theory”, Cambridge U. Press
- Kahneman D. and A. Tversky (eds) (2000), “Choices, Values, and Frames”, Cambridge U. Press
- Rubinstein, A. (2012), “Lecture notes in microeconomic theory : the economic agent”, Princeton U. Press
3. Judgement, beliefs, heuristics and biases
a. The formation of beliefs
b. The revision of beliefs
- Gilboa, I. (2010) “Theory of Decision under Uncertainty”, Cambridge U. Press
- Kahneman D., P. Slovic and A. Tversky (eds) (1982), “Judgement under uncertainty: heuristics and
biases”, Cambridge U. Press
- Kahneman D., (2011), “Thinking fast and slow”, Farrar, Grauss and Giroux
4. Decision-making under risk and uncertainty
a. The use of beliefs: distortion of probabilities
b. Prospect Theory and loss aversion
- Gilboa, I. (2010) “Theory of Decision under Uncertainty”, Cambridge U. Press
- Wakker, P. (2010) “Prospect Theory”, Cambridge U. Press
5. The treatment of time
a. Hyperbolic discounting
b. Myopia and sophistication
c. Self-control
- Frederick, S. , G.Loewenstein, and T.O’Donoghue (2002), “A review of intertemporal choice”. Journal of
Economic Literature, 90; 351-401.
- Gul, F. and W. Pesendorfer (2001) “The simple theory of temptation and self-control”, mimeo Princeton

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

PSE SUMMER SCHOOL 2018 BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS
6. Other regarding preferences
a. Altruism and interdependent preferences
b. Fairness
c. Identity
- Fehr, E. et K. Schmidt (2003) “Theories of Fairness and Reciprocity” in M. Dewatripont, L. Hansen, S.
Turnovsky (Eds), Advances in Econmics and Econometrics -8th world congress, Econometric Society
Monographs, Cambridge University Press
- Sobel, J. (2005) “Social interdependent preferences and reciprocity”, Journal of Economic Literature, , 43,
392-436.

OTHER REFERENCES
Textbooks covering most of the topics studied
- *E.Angner (2016) “A course in behavioral economics”. 2nd edition.Macmillan education, Palgrave
- Just, D. (2014) “Introduction to Behavioral Economics”, Wiley
- Wilkinson N. and M. Klaes (2012) “An introduction to Behavioral Economics", Palgrave Mc Millan
- Akerlof E.R. and Kranton E. (2010) “Identity Economics”, Princeton U. Press

Articles
- Bénabou, R. and J.Tirole (2004) “Willpower and Personal Rules” Journal of Political Economy, 112(4): 848–86
- Fehr E. and K. Schmidt (2001) “A Theory of fairness, competition, and cooperation”, Quarterly Journal of
Economics
- Fehr E. and K. Schmidt (2003) “Theories of Fairness and Reciprocity” in M. Dewatripont, L. Hansen, S. Turnovsky
(Eds), Advances in Econmics and Econometrics -8th world congress, Econometric Society Monographs, Cambridge
University Press
- Gilboa, I. (2010) “Theory of Decision under Uncertainty”, Cambridge U. Press
- Gilboa, I. and D. Schmeidler (2001) “A Theory of Case Based Decision”, Cambridge U. Press
- Gul, F. and W. Pesendorfer (2001) “The simple theory of temptation and self control”, mimeo Princeton U
- Kahneman, D. and A. Tversky (eds) (2000), “Choices, Values, and Frames”, Cambridge U. Press
- Kahneman, D. and A. Tversky (eds) (1982), “Judgment under Uncertainty: heuristics and biases”, Cambridge U.
Press
- Koszegi, B. and M. Rabin (2006), “A model of reference-dependent preferences”, Quarterly Journal of Economics,.
- Laibson, D. (1997) “Golden eggs and hyperbolic discounting”, Quarterly Journal of Economics,
- Loewenstein, O’Donoghue and S. Frederick (2002 “A review of intertemporal choice”. Journal of Economic
Literature, 90; 351-401,.
- Rabin, M. (1997) “Incorporating fairness into economics and game theory”, American Economic Review,
- Shiller, R. (2000) “Irrational Exuberance”, Princeton U. Press,.
- Sovel, J. (2005) “Social interdependent preferences and reciprocity”, Journal of Economic Literature, , 43, 392-
436.
- Wakker, P. (2010) “Prospect Theory”, Cambridge U. Press
- Martimort D. and Sand-Zantman W. (2016). “A Mechanism Design Approach to Climate-Change Agreements”,
Journal of European Economic Association, 14.
- Martimort D. and Sand-Zantman W. (2013). “Solving the Global Warming Problem: Beyond Markets, Simple
Mechanisms May Help!", Canadian Journal of Economics, 46: 361-378 (Lead paper)

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

PSE SUMMER RATIONALITY
BOUNDED SCHOOL 2018 & BEHAVIORAL ECONOMICS
BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS

Ignorance, Information and Sophistication

Olivier Compte

This course takes place every day

OBJECTIVES
The objective of the class is to take a critical journey across economic theory (decision theory under uncertainty,
auctions, repeated games, reputation, information transmission...). Our models generally assume that agents know
with precision the environment they face, or the exact distributions over the parameters that the analyst assumes. This
places strong cognitive demands on agents, or it gives agents extraordinary powers of discernment. Our aim will be to
identify these cognitive demands, highlight how our intuitions are shaped by (and sometimes hinge on) these
demands, and suggest alternative models that assume lesser sophistication on agents. Along the way, we shall also
review how the path proposed, based on direct strategy restrictions, compete with other methods for limiting the
rationality of economic agents.

COURSE STRUCTURE
1. Modeling ignorance and the role of strategy restrictions
2. Bounded rationality models
3. Shortcomings /criticisms of standard models
4. Strategy restrictions in Applications (Auctions, bargaining, information transmission)
5. Application continued (Learning, reputation, repeated games, global games, unraveling)

REFERENCES PER COURSE

1. Modeling ignorance and the role of strategy restrictions
References: Venn, von Mises, Savage, Allais, Ellsberg, Fox and Tversky, Rubinstein, Gilboa Schmeidler, Bewley,
Hansen Sargent, Gigerenzer

2. Bounded rationality models

References: Geneakoplos, Gilboa Schmeidler, Thurstone, Brock and Marschak, McKelvey Palfrey, Rosenthal,
Osborne Rubinstein, Jehiel, Laibson, Mariotti Carrillo, Benabou Tirole, Koszegi, Compte Postlewaite

3. Shortcomings /criticisms of standard models

References: Myerson, Morgan Krishna, Pesendorfer Swinkels, Fedderson Pesendorfer, Cremer McLean, Maskin
Tirole, Radner Maskin Myerson Radner, Fudenberg Levine Maskin, Abreu Milgrom Pearce, Cremer Khalil,
Ganuzza, Dessein

4. Strategy restrictions at work

References: Milgrom Weber, Capen et al., Crawford Sobel, Bray, Fudenberg Levine, Carlson , Carlson Van
Damme, Morris Shin

SOME OTHER REFERENCES

- Allais, M. (1953). "Le comportement de l'homme rationnel devant le risque: critique des postulats et axiomes
de l'école Américaine", Econometrica 21 (4): 503–546
- Bewley, T.(1986), "Knightian decision theory, part I, " Cowles Foundation paper
- Ellsberg, D. (1961). "Risk, Ambiguity, and the Savage Axioms". Quarterly Journal of Economics. 75 (4): 643–
669.
- Fox, C. and A. Tversky (1995). "Ambiguity Aversion and Comparative Ignorance". Quarterly Journal of
Economics. 110 (3): 585–603.
- Gigerenzer, G. (2007). “Gut feelings: The intelligence of the unconscious”. New York: Viking Press.
- Gilboa, I. and D. Schmeidler, 1988, “Maxmin Expected Utility with a non-unique prior”, Journal of
Mathematical Economics, 18, 141-153
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PSE SUMMER SCHOOL 2018 BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS
- Hacking, I. (2006) “The Emergence of Probability: A Philosophical Study of Early Ideas about Probability”,
Induction and Statistical Inference, 2nd Edition, Cambridge University Press.
- Hansen L.P. and T. J. Sargent (2007) “Robustness”, Princeton University Press
- von Mises, R. (1957) “Probability Statistics and Truth, 2nd revised edition”, Dover Publication inc., New York.
- Rubinstein, A. (1988) “Similarity and decision-making under risk (is there a utility theory resolution to the
Allais paradox?)”, Journal of Economic Theory, 46, 145-153
- Rubinstein, A. (1991), “Comments on the Interpretation of Game Theory”, Econometrica, Vol. 59, No. 4, pp.
909-924
- Savage, L. (1953), “The Foundations of Statistics, New York, Wiley
- Venn, J. (1866), “The Logic of Chance: An Essay on the Foundations and Province of the Theory of Probability,
with Special Reference to Its Application to Moral and Social Science”, London and Cambridge: Macmillan.
- Geanakoplos, J., “Game theory without partitions, an application to speculation”, Cowles Foundation Paper
901
- Gilboa, I. and D. Schmeidler (1995) “Cased based decision theory”, Journal of Political Economy
- Thurstone, L.L. (1927). “A law of comparative judgement”. Psychological Review, 34, 273-286.
- McKelvey, R. and T. Palfrey (1995). "Quantal Response Equilibria for Normal Form Games". Games and
Economic Behavior. 10: 6–38.
- Osborne, M. J. and A. Rubinstein, (1998) “Games with Procedurally Rational Players”, American Economic
Review 88 pp 834–847.
- Pesendorfer, W. and J. M. Swinkels (1997) “The Loser's Curse and Information Aggregation in Common Value
Auctions”. Econometrica, 65(6), 1247--1281.
- Myerson, R. 1981, “Optimal auction design”, Mathematics of Operations Research, 6, 58-73.
- Williams, S. R., 1987, "Efficient Performance in Two Agent Bargaining," J. Economic Theory, 41, 154-172
- Fudenberg, D., D. Levine and E. Maskin (1994) “The Folk Theorem with Imperfect Public Information”,
Econometrica, Vol. 62, No. 5, pp. 997-1039.
- Radner, R., R. Myerson and E. Maskin (1986) “An Example of a Repeated Partnership Game with Discounting
and with Uniformly Inefficient Equilibria”, The Review of Economic Studies, Vol. 53, No. 1., pp. 59-69.
- Ganuza, J.-J. (2004), “Ignorance Promotes Competition: An Auction Model with Endogenous Private
Valuations”, The RAND Journal of Economics, Vol. 35, No. 3, pp. 583-598.
- Capen, E.C. , R.B. Clapp, and W. M. Campbell, (1971), “Competitive Bidding in High Risk Situations”, Journal of
Petroleum Technology, 23, pp 641-53.
- Caplin A. and B. Nalebuff (1986), “Multi-Dimensional Product Differentiation and Price Competition”, Oxford
Economic Papers , New Series, Vol. 38, Supplement: Strategic Behaviour and Industrial Competition, pp. 129-
145.
- Compte, O. and A. Postlewaite (2012a), “Simple auctions”, mimeo.
- Milgrom, P. and R. Weber. 1982. "A Theory of Auctions and Competitive Bidding," Econometrica 50, pp. 443-
59.
- Margaret Bray (1982) "Learning, Estimation, and the Stability of Rational Expectations," Journal of Economic
Theory, vol. 26, no. 2, pp. 318--39.
- Fudenberg, D. and Levine D. (1989), “Reputation and Equilibrium Selection in Games with a Patient Player”,
Econometrica, 57, 759-778
- Kreps, D., P. Milgrom, J. Roberts and R. Wilson (1982), “Rational Cooperation in the Finitely Repeated
Prisoner's Dilemma”, Journal of Economic Theory 27, 245-252.
- Kreps, D. and R. Wilson (1982), “Reputation and Imperfect Information”, Journal of Economic Theory 27, 253-
279.
- Mailath, G. and Samuelson, L. (2006), “Repeated Games and Reputations: Long-Run Relationships”, Oxford
University Press
- Axelrod, R. (1984). “The Evolution of Cooperation”. Basic Books.
- Abreu,D., D. Pearce and E. Stacchetti (1990), "Toward of Theory of Discounted Repeated Games with
Imperfect Monitoring," Econometrica, 58, 1041---1063.
- Compte, O. and A. Postlewaite (2013) “Belief free equilibria”
- Compte, O. and A. Postlewaite (2013) “Folk Theorems “
- Compte, O. and A. Postlewaite (2015) “Pausible cooperation”, Games and Economic Behavior, 91, 45-59.
- Fudenberg, D., D. Levine and E. Maskin (1994), "The Folk Theorem with Imperfect Public Information,"
Econometrica, 62, 997---1039.
- Crawford V. and J. Sobel (1982), “Strategic Information Transmission”, Econometrica, 50, 1431--1451.

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

PSE SUMMER SCHOOL 2018 BOUNDED RATIONALITY AND BEHAVIORAL ECONOMICS
- Ottaviani, M. and F. Squintani (2006), “Naive audience and communication bias”, International Journal of
Game Theory 35:129--150.
- Carlsson, H. (1991), "A Bargaining Model Where Parties Make Errors", Econometrica 59 (5): 1487-1496.
- Embrey, M., G. Fréchette and S. Yuksel (2014), “Cooperation in the Finitely Repeated Prisoner's Dilemma”,
Working paper
- McKelvey R.D. and T. R. Palfrey (1995), "Quantal Response Equilibria in Normal Form Games." Games and
Economic Behavior, 7, 6--38.
- Milgrom, P. and J. Roberts (1982), "Predation, reputation, and entry deterrence," Journal of Economic Theory,
27, 280-312
- Nash, J. (1953), "Two person cooperative games", Econometrica, 21, 128-140.
- Rosenthal, R. (1981), "Games of Perfect Information, Predatory Pricing, and the Chain Store Paradox," Journal
of Economic Theory, 25, 92--100
- Selten, R. (1978). "The Chain-Store Paradox" Theory and Decision 9, 127--159.
- Carlsson, H. (1991), “A bargaining model where parties make errors”, Econometrica, 59, 1487--1496.
- Carlsson, H. and E. van Damme (1993), "Global Games and Equilibrium Selection," Econometrica, 61, 989--
1018.
- Morris, S. and H. Song Shin (2000), "Rethinking Multiple Equilibria in Macroeconomic Modelling," NBER
Macroeconomics Annual 2000, (ed. by B. Bernanke and K. Rogoff ) Cambridge, MA: MIT Press.
- Morris, S. and H. Song Shin (2003), “Global Games: Theory and Applications”, in Advances in Economics and
Econometrics (Proceedings of the Eighth World Congress of the Econometric Society), edited by M.
Dewatripont, L. Hansen and S. Turnovsky; Cambridge University Press.

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

 HOW TO APPLY TO THE PSE SUMMER SCHOOL 2018
Presentation
Our one-week programmes are entirely run in English. Each includes a total of around 30 hours instruction and
workshops and consists of different thematic courses that are complementary. You are expected to participate in all of
the courses; you can follow only one programme per week, but can apply to two consecutive ones. At the end of the
programme, you will receive a certificate.
Each programme is equivalent to 3 ECTS (European Credit Transfer System). Students interested in this transfer should
contact their universities.
Here are the links to the different programmes (lectures, Professors, schedule, prerequisites etc.):
First week - from June 18 to June 22 Second week - from June 25 to June 29

CLIMATE MACROECO. MICROECO. MIGRATION TRADE BOUNDED DEVELOPMENT EXPERIMENTAL HEALTH INDUSTRIAL
CHANGE ECONOMICS RATIONALITY ECONOMICS ORGANIZATION
[not offered in 2018]

Participant profiles and selection

The PSE Summer School is aimed at professionals, researchers, as well as graduate students in Economics and Finance
(Masters and PhD). Undergraduate students in Economics will be considered only if their profile is exceptionally strong.
To be included in your application file:
• A current Curriculum Vitae in pdf format • A profile picture [not used per se in the application process]
• A copy of your most advanced degree • For Students: proof of status
• A short motivation text • Optional - Letter(s) of recommendation
On www.pse-application.eu, candidates are invited to submit their applications on a rolling-basis. You can start the
process whenever you want, create and save your profile step by step. Once we get your final submission, your
applications file will be evaluated within 10 days until May 31, 2018 based on availability of spots in the relevant
programs. Once accepted, you will be requested to pay the total fees within 30 days*. Your participation will then be
confirmed, and you will receive detailed information about the courses, workshops, and social events, as well as
suggestions for accommodation.
* For those applying after May 10, 2018, the payment deadline is in any case June 10, 2018.

Fees
Fees include lunches and social events, as well as the welcome and the farewell cocktails. The fees do not include
accommodation, transport or any other services.
Applicants not sponsored by their organizations Applicants sponsored by their organizations
Excluding applicants from Universities (non-sponsored fees applies)
Fees for Students = 1200€
Fees for other Participants = 1500€ Fees = 2000€

A 250€ discount will be offered on each additional programme. For example: if you are a student attending 2 weeks, the total fees will be 2150€

Note that PSE Alumni, Students and Members receive a 10% discount.

Cancellation policy - Confirmed participants who wish to cancel must do so in writing by email. When withdrawing from
the programme, participants will have their tuition fees partially refunded as follows:
- Cancellation before May 1st, 2018: 80% refund
- Cancellation before June 1st, 2018: 50% refund
- Cancellation after June 1st, 2018: no refund possible
Any questions? [email protected]

PSE SUMMER SCHOOL 2018 www.parisschoolofeconomics.eu

 A SUMMER ON THE JOURDAN CAMPUS…
The 2018 Edition will take place at PSE in the 14th arrondissement of Paris. A new 12500 m² building
houses around 1500 researchers, students, and administrative teams of the PSE and the Ecole normale
supérieure. The 1-hectare Jourdan campus offers ideal conditions: numerous classrooms and working
spaces, a 300 places amphitheater, a library with more than 50000 books, a student home…
More (online) about the Jourdan Campus – google maps, gallery, video
SUMMER SCHOOL

2018, PARIS
www.parisschoolofeconomics.eu